TARP

TARP – Troubled Assets Relief Program – is not an acronym that has yet made its way across the Atlantic in a big way. But it surely won’t be long coming because yesterday it reached me, in the form of an email from Michael Jennings, containing this, which is a pictorial explanation of what it means. Apparently, some of MJ’s Aussie stockbroker mates have been circulating this amongst themselves. A few seconds of googling also got me to a TARP song.

Obviously sanity is losing all the policy battles at the moment, big time, but at least sanity is speaking – and singing – out, and may yet win the ideological war. As I said in a comment on a recent Johnathan Pearce posting here, this bodes well for our great grandchildren, if not for our children.

Hauling heavy things into the air is serious work. You would think that the crane operators would do a little math to see if the crane is up to it. Maybe, figure out a way to tell if the load is too big, ahead of the experiment of seeing the whole crane go over.

They looked into the water and saw the first crane. This didn’t prompt them to get someone who actually knew something, to do those calculations, take precautions, and brace the second crane.

Actually, they did a pretty good job by government standards. The government puts about 10 cranes into the water, then declares that spot to be a crane graveyard. All the while, their policy makers say that it shouldn’t have happened, it doesn’t fit the model they are using.

I’m not sure it’s a “pretty good job” by anyone’s standards, even the government’s. One would think that a crane operator would have enough sense not to have the crade placed sideways. And even if the first operator didn’t, surely someone would have mentioned to the second operator what happened to the first, and he could have figured it out.

And, of course, he should also have figured out that they should detach the car from the first crane before starting the operation.

All in all, I think that everyone involved in this operation (starting with the driver of the automobile) is holding down the bottom end of the intelligence curve quite nicely.

I am remined of the activities of the lady who had a fly go down her throat.

First the lady put a spider down her throat to catch the fly, then the lady put a bird down her throat to catch the spider, then the lady put a cat down her throat to catch the bird.

At some point in this process the lady would, of course, die.

Having major banks go bankrupt is very nasty (although it was caused by an increase in the money supply setting up a credit bubble – an increase in the money supply generated by GOVERNMENTS and only then magnified by fractional reserve activities) and yes many companies linked to the banks (including good companies) would be “dragged down” by their collapse.

But it is the “cure” for this crises that will kill the economies of the West.

Remember even the increase in the money supply was not a one off process.

There were a serious of stages.

Each time the increase in the money supply caused malinvestments (distortions in the capital structure) and each time the bubble looked like it was going to burst.

But then “Alan Greenspan saved the world” by expanding the money supply again in a “rescue mission” (and the other Central Bankers of the various countries followed him – via the “international cooperation” of the sucide pact).

And each time, of course, the credit bubble got bigger.

In the end the bubble burst – when it was a truly vast size.

Even then that would not have destoyed the financial basis of the West – even in the United States I doubt that more than a few big banks (out of hundreds of banks) would have actually gone bankrupt.

It is the insane “cure” for the financial crises (under Bush and Obama – and Brown and …..) that has destroyed the financial basis of so much of the world.

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